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10 Steps to Create and Implement a Strong ERP Strategy

A manufacturing company’s ERP strategy serves as a road map for influencing and shaping ERP software implementation, deployment, and use. ERP software implementation success is contingent upon a calculated and well-planned ERP strategy.

As the manufacturing industry modernizes, many businesses are taking the plunge and investing in ERP software.

Manufacturers require software and technology to stay competitive, but implementing an ERP system is not a decision to be taken lightly. Even when firms attain success and operations run smoothly, there is always room for improvement and the development of more efficient processes. ERP software is designed to delve deeper into a business’s operations and identify areas for development. This is the value of enterprise resource planning software. Deploying an ERP (Enterprise Resource Preparation) system for the first time can be unpleasant since it requires a significant amount of work and precise planning to reap the rewards. Transitioning to a new system can be challenging, as you and your staff must adjust to it and learn how to utilize it efficiently. The primary impediment is that it not only alters the technology used but also has a significant impact on your company’s culture.

However, if done correctly, this stage can be pretty lucrative. It can assist you in synchronizing all of your data, streamlining your business procedures, and dramatically improving cooperation and interaction within your organization.

An ERP system is excellent for cost reduction, and by enhancing collaboration, it may significantly increase production and efficiency, resulting in superior customer service and enabling you to stay ahead of the competition. There are many reasons to implement ERP software, but how do you ensure it is done successfully?

Some Important Steps and Phases for a Successful ERP Strategy and Implementation

1. Discovery and Planning

Which phase of ERP deployment is the initial phase? This comprises conducting research and selecting a system, assembling a project team, and outlining specific system requirements.

The project team will be responsible for various implementation-related tasks, including developing the project plan and deadlines, allocating necessary resources, making design and manufacturing decisions, and managing the project on a day-to-day basis.

Typically, an ERP project team consists of an executive sponsor, a project manager, and representatives from the departments that will utilize the system. Senior management involvement is crucial to ensuring that the project receives the resources it requires and providing the necessary support to implement change across the business. Additionally, the team may hire an outsourcing company or ERP Strategy and Implementation partner to assist with system design and configuration. Additionally, it should include any internal specialists involved in the system’s implementation, such as an IT representative and a report writer who will provide customized reports for users.

One of the team’s initial objectives will be to grasp present difficulties, including process inefficiencies and ERP system requirements. If the firm has already produced an ERP business case, it may have defined broad business concerns and ERP Strategy and Implementation objectives, including accelerating financial close, improving operational visibility, or preparing for an IPO. These can be used to focus the more in-depth investigation, including analysis of existing workflows and system development.

During this phase, the team may choose and acquire an ERP system as the firm understands its requirements. One critical decision is whether to employ an on-premises or cloud-based ERP solution. You purchase and install hardware and software in your organization’s data center for an on-premises solution. By contrast, cloud-based ERP is typically delivered as a subscription service that can be accessed through the internet, making it easier to implement and requiring fewer in-house IT resources.

1. Define Your Goals and Objectives

Before deploying any ERP solution, defining your objectives and ascertaining your precise requirements is critical. Given the various benefits of an ERP system, you may have a general notion of what it can accomplish for your organization, but do you know what objectives it will assist you in achieving?

You must consider your company’s goals and objectives and determine how an ERP system can assist you in accomplishing them. You must assess your KPIs (Key Performance Indicators) to accurately identify the issues that ERP software can assist you in resolving. Additionally, this will provide insight into your future projections, allowing you to adapt your company to change.

3. Create an ERP Strategy and Implementation Framework

The implementation team will then work to create an outline for how the ERP system will be implemented in various workplace departments. Again, feedback from all levels of the organization is critical here, particularly from line-of-business personnel who will be using the software regularly.

Several critical procedures to account for in an ERP installation strategy include the following:

  • Accounts payable and receivable
  • Customer relationship management
  • Inventory management
  • Materials sourcing and tracking
  • Shipping and receiving
  • Quality assurance and quality control
  • HR and payroll

4. Choose a Project Manager for Guidelines

You’ll want to hire a qualified project manager who can oversee the ERP Strategy and Implementation process. A professional with the essential expertise and knowledge, and experience will lead your staff through the process, ensuring that they grasp its significance and influence on your company and clarify their duties and responsibilities.

This is why you need either hire someone with the proper skill set or identify an existing person with outstanding management and communication skills to fill the project manager function. You’ll save considerable time that you can commit to your core talents and other necessary duties for a successful ERP deployment.

5. Select a Perfect ERP Software According to Your Requirements

Finding the appropriate ERP software for business needs is likely the most critical step, as not every ERP solution will provide you with the same benefits. What worked flawlessly for another person may not be the optimal option for your unique business requirements.

Because there is no such thing as a one-size-fits-all solution for this type of software ERP Strategy and Implementation, you must consider your business demands, the industry in which you operate, your system requirements, and your future aspirations.

For instance, do you require an on-premise system, or will a cloud option suffice? It would be best to research and examine all conceivable scenarios with a professional ERP consultant to make the best choice.

Regardless of the degree to which a solution is customized, the following are some of the critical questions that an organization’s ERP deployment plan must address:

  • Will the rollout occur in stages or all at once?
  • Which procedures, clients, and departments will be converted immediately, and which will maintain the old system throughout a gradual rollout?
  • Which data should be prioritized for migration, and which data can be safely left out?
  • Will the rollout be primarily SaaS-based, or will significant amounts of new IT gear be purchased and installed?
  • What difficulties are likely to arise throughout the transition, especially those affecting individual departments?

6. Designing

The design phase develops a project plan for the new ERP system based on precise requirements and understanding present workflows. This includes the development of new, more efficient workflows and other business processes that utilize the system. It is critical to include users during the design phase, as they possess the most detailed knowledge of current business processes. By involving them in the design process, you can assure that they will embrace the new system and make the most of it.

Gap analysis can discover process complexities and unique idiosyncrasies that may require ERP software customization or adjustments to workflow or processes to bring them more closely into line with the ERP system. The team can communicate the shortcomings to its implementation partner or supplier and solicit their assistance in identifying potential solutions.

7. Data Migration

Data migration is a critical stage in a successful ERP Strategy and Implementation since, when done correctly, it may significantly streamline your operations; when done incorrectly, it can take a long time to correct. Before transferring all of your data into your new ERP system, you should filter out anything you find unneeded or wrong to clean and accurate the new system.

Your goal is to clean up all of your data and convey only the most essential information so that you may achieve efficiency and data integrity.

8. ERP Development

The development phase can begin once clear design criteria have been established. This procedure entails setting and, if necessary, adapting the software to accommodate the revised processes. Additionally, connection with any of the organization’s existing business applications that the ERP system will not replace may be required. If your firm utilizes an on-premises ERP system, you will need to install the required hardware and software.

In parallel with software design and development, the team should design training materials to help users acclimate to the new system. Additionally, it must begin planning data migration, which can be complicated because it frequently requires extracting, processing, and loading data from numerous systems, each of which may use a different format and contain duplicate or inconsistent data. The project team should decide which data to move during this phase, avoiding a blanket migration of all previous data, the majority of which is almost certainly irrelevant. (For additional information on data migration, see the section below.)

9. ERP Software Testing

After configuring your selected ERP system, you must enter a testing phase to confirm that everything is functioning correctly. Testing is a critical component of the ERP deployment process since it provides insight into the system’s functioning and ensures a smooth transition. Never go live without conducting thorough system and user acceptance testing.

The testing procedure begins once the vendor and your Technical department have installed the system. The rollout plan of an organization establishes the framework for its testing procedure. This procedure could include any or all of the following:

  • ERP solution phasing on a limited number of accounts and in specific departments.
  • Conducting integration testing with the business’s other software products to guarantee compatibility.
  • Recruiting user acceptance testing (UAT) teams from various departments to ensure that the installation fulfills the organization’s operational needs.
  • Security testing, perhaps with the assistance of security consultants
  • Performance testing to ensure the system can handle increases in traffic load.

Additionally, it is critical to begin training personnel on the new system well before they will be required to utilize it daily. While instructional films may work enough for some employees, others may require live one-on-one training with an expert. Utilize the training options provided by the majority of ERP suppliers to familiarise personnel with the new system. 

10. ERP Deployment 

This is the day you’ve been working toward the system’s launch. Prepare for potential complications, as there may be numerous moving components and some puzzled staff, despite your best attempts to prepare them for the shift. The project team should be available for questions, assist users in understanding the system, and strive to resolve any concerns. If necessary, your ERP Strategy and Implementation partner should be able to assist with problems. Users may require time to adjust to the system and realize the projected productivity advantages.

While specific data can be transferred in advance of deployment, others, such as live transactions, should be migrated before becoming live.

While some companies attempt to continuously implement all of the ERP system modules, others prioritise selecting high-priority modules or processes first and then adding others in stages. Some firms continue to run legacy systems alongside the new ERP Strategy and Implementation for some time; however, this can increase the overall project costs by reducing work efficiency.

Check out: Why Should Cloud Migration Be Your Top Priority in 2021?

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